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Shell litigation in the Dutch courts – milestones for private international law and the fight against climate change
by Xandra Kramer (Erasmus University Rotterdam/Utrecht Univeristy) and Ekaterina Pannebakker (Leiden University), editors
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Introduction
As was briefly announced earlier on this blog, on 29 January 2021, the Dutch Court of Appeal in The Hague gave a ruling in a long-standing litigation launched by four Nigerian farmers and the Dutch Milieudefensie. The Hague Court held Shell Nigeria liable for pollution caused by oil spills that took place in 2004-2007; the UK-Dutch parent company is ordered to install equipment to prevent damage in the future. Though decided almost four months ago, the case merits discussion of several private international law aspects that will perhaps become one of the milestones in the broader context of liability of parent companies for the actions of their foreign-based subsidiaries.
Climate change and related human rights litigation is undoubtedly of increasing importance in private international law. This is also on the radar of the European institutions as evidenced among others by the ongoing review of the Rome II Regulation (point 6). Today, 26 May 2021, another milestone was reached, both for for private international law but for the fight against global climate change, with the historical judgment (English version, Dutch version) by the Hague District Court ordering Shell to reduce Co2 emissions (point 7). This latter case is discussed more at length in today’s blogpost by Matthias Weller.
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Oil spill in Nigeria and litigation in The Hague courts
As is well-known Shell and other multinationals have been extracting oil in Nigeria since a number of decades. Leaking oil pipes have been causing environmental damage in the Niger Delta, and consequently causing health damage and social-economic damage to the local population and farmers. Litigation has been ongoing in the Netherlands and the United Kingdom for years (see Geert van Calster blog for comments on a recent ruling by the English Supreme Court). At stake in the present case are several oil spills that occurred between 2004-2007 at the underground pipelines and an oil well near the villages Oruma, Goi and Ikot Ada Udo. The spilled oil pollutes agricultural land and water used by the farmers for a living.
Shortly after the oil spills, four Nigerian farmers instituted proceedings in the Netherlands, at the District Court of The Hague. The farmers are supported by the Dutch foundation Milieudefensie, which is also a claimant in the procedure. The claimants submit that the land and water, which the Nigerian farmers explored for living, became infertile. They claim compensation for the damage caused by the Shell’s wrongful acts and negligence while extracting oil and maintaining the pipelines and the well. Furthermore, they claim to order Shell to secure better cleaning of the polluted land and to take appropriate measures to prevent oil leaks in the future.
The farmers summon both the Shell’s Nigerian subsidiary and the parent company at the Dutch court. To be precise, they institute proceedings against the Shell’s Nigerian subsidiary – Shell Petroleum Development Company of Nigeria Ltd and against the British-Dutch Shell parent companies – Royal Dutch Shell Plc (UK), with office in The Hague; Shell Petroleum N.V. (a Dutch company) and the ‘Shell’ Transport and Trading Company Ltd (a British company). It is this corporate structure that brings the Nigerian farmers to the court in The Hague and paves the way for the jurisdiction of Dutch courts.
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Jurisdiction of Dutch courts: anchor defendant in the Netherlands and sufficient connection
Both the first instance court (in 2009) and the court of appeal at The Hague (in appeal in 2015) hold that the Dutch courts have jurisdiction. The ruling of the Court of Appeal is available in English and contains a detailed motivation of the grounds of jurisdiction of the Dutch courts. See in particular at [3.3] – [3.9].
Claim against Shell parent company/companies. Dutch courts have jurisdiction to hear the claim against Shell Petroleum based on art. 2(1) Brussels I Regulation, as the company has its registered office in the Netherlands. Furthermore, the jurisdiction of Dutch courts to hear the claims against Royal Dutch Shell is based on art. 2(1) in conjunction with art. 60(1) Brussels I Regulation and the jurisdiction over claims to Shell Transport and Trading Company – on art. 6(1) and art. 24 Brussels I Regulation.
Claim against Shell’s Nigerian subsidiary. The jurisdiction of the Dutch courts to hear the claim against Shell’s Nigerian subsidiary is based on art. 2(1) in conjunction with art. 60(1) Brussels I Regulation and on art. 7(1) of the Dutch Code of civil procedure (DCCP). Art. 7(1) deals with multiple defendants. By virtue of art. 7(1) DCCP, if the Dutch court with jurisdiction to hear the claim against one defendant (in this case this is the Royal Dutch Shell), has also the jurisdiction to hear the claims against co-defendant(s), ‘provided the claims against the various defendants are connected to the extent that reasons of efficiency justify a joint hearing’. The jurisdiction on the claim against the so-called ‘anchor defendant’ (for instance, the parent company) can thus carry with itself the jurisdiction on the other, connected, claims against other defendants.
Both the first instance court and the court in appeal found that the claims were sufficiently connected, despite the contentions of Shell. The Shell’s contentions were twofold. First, Shell stated that the claimants abused procedural law, because the claims against Royal Dutch Shall were ‘obviously bound to fail and for that reason could not serve as a basis for jurisdiction as provided in art. 7(1) DCCP’ (at [3.1] in the 2015 ruling). According to Shell, the claim was bound to fail, because the oil leaks were caused by sabotage, in which case Shell would be exempt from liability under the applicable Nigerian law. This contention was dismissed: the claim was not necessarily bound to fail, according to the first instance court. The appellate court added that it was too early to assume that the oil spill was caused by sabotage. Second, Shell contested the jurisdiction of the Dutch courts because the parent companies could not reasonably foresee that they would be summoned in the Netherlands for the claims as the ones in the case. Dismissing this contention the court of appeal at The Hague stated in the 2015 ruling that ‘in the light of (i) the ongoing developments in the field of foreign direct liability claims (cf. the cases instituted in the USA against Shell for the alleged involvement of the company in human rights violations; Bowoto v. Chevron Texaco (09-15641); Kiobel v Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), as well as Lubbe v. Cape Plc. [2000] UKHL 41), added to (ii) the many oil spills that occurred annually during the extraction of oil in Nigeria, (iii) the legal actions that have been conducted for many years about this (for over 60 years according to Shell), (iv) the problems these oil spills present to humans and the environment and (v) the increased attention for such problems, it must have been reasonably foreseeable’ for the parent companies taken to court with jurisdiction with regard to Royal Dutch Shell (see the 2015 ruling at [3.6].
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Application of (substantive) Nigerian law
Substantive law. All claims addressed in the Court of Appeal ruling of 29 January 2021 are assessed according to Nigerian law. This is the law of the state where the spill occurred, the ensuing damage occurred and where the Shell’s Nigerian subsidiary (managed and monitored by Shell) has its registered office. The events that are the subject of litigation occurred in 2004-2007 and fall outside the temporal scope of Rome II. Applicable law is defined based on the Dutch conflict of laws rules on torts, namely art. 3(1) and (2) Wet Conflictenrecht Onrechtmatige Daad (see the first instance ruling at [4.10]).
Procedural matters. Perhaps because the case of damage to environment as the one in the discussed case, the application of substantive law is strictly tied to the evidence, the court goes on to specify private international law with further finesse. It mentions explicitly that procedural matters are regulated by the Dutch code of civil procedure. In the meantime, the substantive law aspects of the procedure, including the question which sanctions can be imposed, are governed by the lex causae (Nigerian law). The same holds true for substantive law of evidence, including the specific rules on the burden of proof relating to a particular legal relationship. The other, general matters relating to the burden of proof and evidence are regulated by the lex fori, thus the Dutch law of civil procedure (at [3.1]).
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The ruling of The Hague Court of Appeal
In its the ruling, the Dutch court holds Shell Nigeria liable for damage resulting from the leaks of pipelines in Oruma and Goi. Nigerian law provides for a high threshold of burden of proof that rests on the one who invokes sabotage of the pipelines (in this case, Shell). The fact of sabotage must be (evidenced to be) beyond reasonable doubt. Shell could not provide for such evidence for the pipelines in Oruma and Goi. Furthermore, Shell has not undertaken sufficient steps for the cleaning and limiting environmental damage. Shell Nigeria is therefore liable for the damage caused by the leaks in the pipelines. The amount of the damage to be compensated is still to be decided. The relevant procedure will follow up. The ruling is, however, not limited to this. Shell is also ordered to build at one of the pipelines (the Oruma-pipeline) a Leak Detection System (LDS), so that the future possible leaks could be swiftly noticed and future damage to the environment can be limited. This order is made to Shell Nigeria and to the parent companies.
Spills at Oruma and Goi are are two out of three oil spills. The procedure on the third claim – the procedure regarding the well at Ikot Ada Udo will continue: the reason for the oil spill is not yet clear and the next hearing has been scheduled.
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Human rights litigation and Rome II
This Shell case at the Dutch court is one in a series of cases where human rights and corporate responsibility are central. Increasingly, it seems, victims of environmental damage and foundations fighting for environmental protection can celebrate victories. In the introduction we mentioned the English Supreme Court ruling in Okpaby v Shell [2021] UKSC 3 of February 2021. In this case the Supreme Court reversed judgments by the Court of Appeal and the High Court in which the claim by Nigerian farmers brought against Shell’s parent company and its subsidiary in Nigeria had been struck out (see also Geert van Calster’s blog, guest post by Robert McCorquodale). Also there is a growing body of doctrinal work on human right violations in other countries, corporate social responsibility, due diligence and the intricacies of private international law, as a quick search on the present blog also indicates.
From a European private international law perspective, as also the discussion above shows, the Brussels Ibis Regulation and the Rome II Regulation are key. The latter Regulation has been subject of an evaluation study commissioned by the European Commission over the past year, and the final report is expected in the next months. Apart from evaluating ten years of operation of this Regulation, one of the focal points is the issue of cross-border corporate violations of human rights. The question is whether the present rules provide an adequate framework for assessing the applicable law in these cases. As discussed in point 5 above, in the Dutch Shell case the court concluded that Nigerian law applied, which may not necessarily be in the best interest of environmental protection. This was based on Dutch conflict rules applicable before the Rome II Regulation became applicable, but Art. 4 Rome II would in essence lead to the same result. For environmental protection, however, Art. 7 Rome II may come to the rescue as it enables victims to make a choice for the law of the country in which the event giving rise to damage occurred instead of having the law of the country in which the damage occurs of Art. 4 applied. In a similar vein, the European Parliament in its draft report with recommendations to the Commission on corporate due diligence and corporate accountability, dated 11 September 2020, proposes to incorporate a general ubiquity rule in art. 6a, enabling a choice of law for victims of business-related human rights violations. In such cases a choice could be made for the law of the country in which the event giving rise to the damage occurred, or the law of the country in which the parent company has its domicile, or, where it does not have a domicile in a Member State, the law of the country where it operates. This draft report, which also addresses the jurisdiction rules under the Brussels Ibis Regulation was briefly discussed on this blog in an earlier blogpost by Jan von Hein.
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Shell and climate continued: The Hague court strikes again
Today, all eyes were on the next move of The Hague District Court in an environmental claim brought against Royal Dutch Shell Plc (RDS). It concerns a collective action under the (revised) Dutch collective action act (see earlier on this blog by Hoevenaars & Kramer, and extensively Tzankova & Kramer 2021), brought – once again by Milieudefensie, also on behalf of 17,379 individual claimants, and by six other foundations (among others Greenpeace). The claim boils down to requesting the court to order Shell to reduce emissions. First, the court extensively deals with the admissibility and representativeness of the claimants as part of the new collective action act (art. 3:305a Dutch Civil Code). Second, the court assesses the international environmental law, regulation and policy framework, including the UN Climate Convention, the IPCC, UNEP, the Paris Agreement as well as European law and policy and Dutch law and policy.
Third, and perhaps most interesting for the readers of this blog, the court assesses the applicable law, as the claim concerns the global activities of Shell. As Weller has highlighted in his blogpost that discussion mostly evolves around Art. 7 Rome II. Milieudefensie pleaded that Art. 7 should, pursuant to its choice, lead to the applicability of Dutch law and, should this provision not lead to Dutch law, on the basis of Art. 4(1) Rome II. In establishing the place where the event giving rise to the damage occurs the court states that ‘An important characteristic of the environmental damage and imminent environmental damage in the Netherlands and the Wadden region, as raised in this case, is that every emission of CO2 and other greenhouse gases, anywhere in the world and caused in whatever manner, contributes to this damage and its increase.’ Milieudefensie holds RDS liable in its capacity as policy-setting entity of the Shell group. RDS pleads for a restrictive interpretation and argues that corporate policy is a preparatory act that falls outside the scope of Art. 7 as ‘the mere adoption of a policy does not cause damage’. However, The Hague Court finds this approach too narrow and agrees with the claimants that Dutch law applies on the basis of Art. 7 and that, in so far as the action seeks to protect the interests of Dutch residents, this also leads to the applicability of Dutch law on the basis of Art. 4.
The judgment of the court, and that’s what has been all over the Dutch and international media, is that it orders ‘RDS, both directly and via the companies and legal entities it commonly includes in its consolidated annual accounts and with which it jointly forms the Shell group, to limit or cause to be limited the aggregate annual volume of all CO2 emissions into the atmosphere (Scope 1, 2 and 3) due to the business operations and sold energy-carrying products of the Shell group to such an extent that this volume will have reduced by at least net 45% at end 2030, relative to 2019 levels’.
To be continued – undoubtedly.
The Role of the International Social Service in the History of Private International Law
by Roxana Banu
The “International Social Service” (initially named “International Migration Service”) was created in 1920 by the Young Women Christian Association as a network of social work branches helping migrant women and children. In 1924 it became an independent transnational network of social work agencies offering socio-legal services to migrants and refugees, irrespective of gender, religion or race. It grew exponentially since then and is now present in over 120 countries helping more than 75,000 families each year. Since its inception and largely unbeknownst to private international law scholars, it worked (and continues to work) on virtually every aspect of transnational family law. In the first half of the twentieth century the ISS used its extensive database of social work case records to draft expert opinions on private international law matters for the League of Nations, bar associations, the US Congress, the Hague Conference on Private International Law and others. It devised and coordinated interdisciplinary teams of experts to conduct research on cross-border family maintenance and cross-border adoptions. It experimented with all sorts of legal arguments in order to push for new claims in private international law, especially in U.S. courts.
The ISS has been hiding in plain sight in the history of private international law since the 1920s. Anyone lucky enough to visit ISS-USA’s archives at the University of Minnesota would be astonished by ISS’s extensive engagement with virtually every aspect of transnational family law. During the first half of the 20th century the ISS left no stone untouched in an effort to devise an international socio-legal framework for cross-border family maintenance claims. It lobbied scholars, consuls, employers, national legislators and international organizations; its global network of social workers worked together to inform women living abroad when their husbands attempted to file divorce proceedings in the U.S.; it experimented with entirely new and imaginative legal arguments to convince U.S. courts to assume jurisdiction over foreign women’s maintenance claims against their husbands living in the U.S.; and it submitted expert evidence to the Child Welfare Committee of the League of Nations.
Unbeknownst to contemporary private international law scholars, the report sent by Ernst Rabel to the League of Nations on cross-border maintenance claims had in fact been commissioned by the ISS and based almost entirely on its case files. The entire project on cross-border maintenance claims was in fact the brainchild of Suzanne Ferriere, ISS’s General Secretary until 1945 and thereafter its assistant director and one of only three women on the International Committee of the Red Cross during WWII.
In the 1930s the ISS was involved in the debates on the nationality of married women at the League of Nations. Unlike other feminist organizations, which were skeptical of the League’s attempt to conceptualize the issue of married women’s nationality as a conflict of laws question, the ISS offered an analysis of its case records precisely to press the League to become more conscious and more precise about the conflict-of-laws dimensions of the issue of married women’s nationality. It continued to press for legal aid for foreign citizens, to help foreigners bring inheritance and property claims either in the U.S. or in their countries of origin and to press U.S. and foreign courts to co-operate with each other in cross-border family law matters.
In between the two World Wars several ISS social workers were responsible for the relocation of Jewish children to the U.S., devising new rules on cross-border guardianship and adoption almost from scratch. After the Second World War ISS personnel collaborated with the United Nations Relief and Rehabilitation Administration in setting up cross-border adoption and guardianship standards for displaced unaccompanied minors. Meanwhile, back in the U.S., ISS members petitioned the US Congress to raise the quota for adopted children and to disallow adoptions by proxy.
Most of the issues the ISS had been working on in the first half of the 20th century belonged to an unchartered private international law territory. With modest funds, ISS branches often engaged in detailed legal research projects. Among many other gems, ISS USA’s archive contains numerous article clippings, extensive correspondence and research inquiries sent to universities, legislators or other social workers in an attempt to piece together private international law concepts and techniques that were unknown even to legal practitioners and scholars at the time.
Recovering the history of ISS’s engagement with private international questions is worthwhile in itself. But even more remarkably, one could zoom in and out of the ISS and thereby begin to write an entirely new history of private international law. Zooming in, one is exposed to a surprising joined history between transnational social work and private international law. As the ISS was pioneering new transnational case-law methods, it placed private international law squarely in its center, to the dismay of both social workers and private international law scholars. Reading social workers’ forays into private international law together with their writings on transnational social work methods and on multiculturalism offers a new window into private international law’s and social workers’ engagements with the foreign, contradictory and paradoxical as they may be. Zeroing in on the ISS as a private international law agent also exposes a whole range of women – social workers, philanthropists, ambassadors’ wives, Hollywood actresses – that are entirely unknown to a field that it yet to write its gendered history.
Zooming out of the ISS offers yet another lens through which to re-write private international law’s history. On the one hand, ISS combined a micro-analysis on individual cases and individual families with a macro-analysis of the geopolitical context causing hardship for families across borders. Tapping into this dual standpoint presses private international law, through the eyes of the ISS, to reconstruct its relationship with migration law and policy and with the field of international relations. On the other hand, moving the analysis from the ISS outward means joining private international law back with the extensive network that the ISS itself was relying on when doing its work. Among many other remarkable figures, this network exposes Jewish women émigrés to the Americas who were using their dual-legal background to help migrants or who had managed to become private international law professors in their own right. For example, although most would be familiar with Werner Goldschmidt’s work in Private International Law, few would know that his sister-in-law, Ilse Jaffe Goldschmidt opened an ISS branch in Venezuela (the Nansen Medal was awarded to its director general, Maryluz Schloeter Paredes, in 1980) and worked extensively on cross-border adoption matters.
Engaging with the history of the ISS means retracing an incredible range of connections between private and public international, migration law and policy, foreign affairs and social work, connections which were often built and fostered by the ISS itself. The archive contains interviews, studies in refugee camps, cross-branches socio-legal research studies, expert opinions offered to a whole range of actors, reports and opinion pieces on a broad set of geopolitical and socio-legal topics, as well as confidential letters sent between the branches cataloging the challenges of their unprecedented work. Whether one is interested to recover the range of private international law projects that the ISS was involved in or engages with the ISS as a window through which to gage a new history of private international law, its extensive archives in every corner of the world are waiting to be explored.
Roxana Banu is a Lecturer in Private International Law at Queen Mary University of London, Faculty of Law. Roxana researches on legal history and feminist perspectives on private international law. She is the author of Nineteenth Century Perspectives on Private International Law (OUP, 2018) and “A Relational Feminist Perspective on Private International Law,” awarded the ASIL Prize for the best paper in Private International Law in 2016. She is currently writing a book on a gendered history of private international law, which includes a more detailed discussion of the role of the ISS in the history of private international law. She offers a brief portrait of the women of the ISS in Roxana Banu, “Forgotten Female Actors in the History of Private International Law. The Women of the International Social Service 1920-1960,” in Immi Tallgren ed., Portraits of Women in International Law (forthcoming with OUP, 2021).
originally posted at www.iss-usa.org March 3, 2021
One Year of Pandemic-Driven Video Hearings at the German Federal Court of Justice in International Patent Matters: Interview with Federal Judge Hartmut Rensen, Member of the Tenth Panel in Civil Matters
Benedikt Windau, the editor of a fabulous German blog on civil procedural law, www.zpoblog.de, recently interviewed Federal Judge Dr Hartmut Rensen, Member of the Tenth Panel of the division for civil and commercial matters at the German Federal Court of Justice (Bundesgerichtshof) on the experiences with video hearings in national an international patent matters in the pandemic. I allow myself to pick up a few elements from this fascinating interview in the following for our international audience:
The Tenth Panel functions as a court of first appeal (Berufungsgericht) in patent nullity proceedings and as a court of second appeal for legal review only (Revisionsgericht) in patent infringement proceedings. In both functions, particularly in its function as court of first appeal, actors from all over the world may be involved, and indeed, Judge Rensen reported about parties and their respective representatives and teams from the USA, Japan, South Korea, the UK, France, Italy and Spain during the last year.
Obviously, the start of the pandemic raised the question how to proceed, once physical hearings on site could no longer take place as before, since particularly in the appeal proceedings parties had usually appeared with several lawyers, patent lawyers, technical experts, interpreters etc., i.e. a large number of people had gathered in rather small court rooms, to say nothing of the general public and media. Staying all proceedings until an expected end of the pandemic (for which we are still waiting) would indeed have infringed the parties‘ fundamental procedural right to effective justice, abstaining from oral hearings and resorting to submission and exchange of written documents instead, as theoretically provided as an option under section 128 (2) German Code of Civil Procedure, would evidently not have been satisfying in matters as complex as patent matters (as well as probably in most other matters).
German civil procedural law allows for video hearings under section 128a (1) German Code of Civil Procedure. It reads (in the Governments official, yet may be not entirely perfect translation): „The court may permit the parties, their attorneys-in-fact, and advisers, upon their filing a corresponding application or ex officio, to stay at another location in the course of a hearing for oral argument, and to take actions in the proceedings from there. In this event, the images and sound of the hearing shall be broadcast in real time to this location and to the courtroom.“ The key word is „permit“. If the court „permits“ the parties etc. to proceed as described, it does not mean that the parties are required to do so. And indeed, parties applied for postponing scheduled hearings instead of going into video hearings. The presiding judge of the court has to decide on such a motion according to section 227 on „changes of date for scheduled hearings“. Section 227 (1) Sentence 1 reads: „Should substantial grounds so require, a hearing may be cancelled or deferred, or a hearing for oral argument may be postponed“. Sentence 2 reads: „The following are not substantial grounds: No. 1: The failure of a party to appear, or its announcement that it will not appear, unless the court is of the opinion that the party was prevented from appearing through no fault of its own“. Is this enough ground to reject the motion in light of the offer to go into video hearings? The Tenth Panel was brave enough to answer this question positively. Further, it was brave enough to overcome the friction between section 128a – permission for video hearings to be decided by the entire bench of the court at the opening of the first hearing – and section 227 (1) – decision about the motion to postpone a scheduled hearing by the presiding judge prior to that hearing. In the interest of progress in e-justice and effective access to justice in times of the pandemic, this is to be applauded firmly, all the more because the Panel worked hard, partly on its own initiative (as the general administration of the court would have been far too slow), to equip the court room with the necessary video technology: several cameras showing each judge and the entire bench, at the same time making sure that no camera reveals internal notes, the same for each party and team. The video conference tool that is currently used is MS Teams (despite all obvious concerns) as being the most reliable one in terms of broadcasting image and sound. The Panel invited to technical rehearsals the day before the hearing and for feed-backs afterwards, in order to improve itself and in order to build up trust, which seemed to have been quite successful. The specific nature of patent proceedings resulted in the insight that the function „screen sharing“ is one of the most helpful tools which will probably continue to be used in post-pandemic times. Sounds to me like examples of best practice. In sometimes rather „traditional“ environments of the German administration of justice, this is not a matter of course.
In relation to sovereignty issues when foreign parties are involved, the Panel takes the view that the territorial sovereignty of a foreign jurisdiction is not affected by a mere permission in the sence of section 128a because the place of the hearings can be considered still as being the locus of the court, i.e. Karlsruhe, Germany. Judge Rensen reported about talks between the Federal Ministry of Justice and its counterparts on the level of the states to the opposite, but as Judge Rensen pointed out, these are ongoing talks amongst ministerial officers, no court decisions or specific legislations that would bind the Panel. Things are certainly more difficult when it comes to the taking of evidence. The Panel has done this only once so far, apparently within the scope of application of the EU Taking of Evidence Regulation. This case was specific, insofar as the testimony appeared to be entirely in line with and supported by undisputed facts and other testimonies, and these circumstances established a particularly solid overall picture about the point. This is why the Panel held the video testimony to be sufficient, which might mean that in mixed pictures the Panel might tend towards insisting on testimony in physical presence. In general, Judge Rensen supported judge-made progress, as opposed to specific legislation on legal assistance, as such legislation (like the EU legislation, including its latest recast on the matter) might lead to the misconception that such legislation would be required as a matter of principle in all cases to allow video hearings with foreign participants. For this reason, he pleaded for taking this factor into account before reforming section 128a (if at all), as such legislation would not be in sight in relation to a number of third states. At the same time the work of e.g. the HCCH on improving and modernising legal assistance under the HCCH 1970 Convention on the Taking of Evidence may be helpful nevertheless to promote and support video hearings in legal certainty, see e.g. the HCCH 2020 Guide to good practice on the use of video-link under the Hague Evidence Convention, but indeed the approach towards states staying outside these legal frameworks must be considered likewise.
News
HCCH Monthly Update: April 2024
Meetings & Events
From 8 to 12 April 2024, the Working Group on Parentage / Surrogacy met for the second time. Pursuant to its mandate, the Working Group continued its consideration of draft provisions for one new instrument on legal parentage generally, including legal parentage resulting from an international surrogacy agreement. More information is available here.
Vacancies
Applications are now open for a Communications and Outreach Internship at the Permanent Bureau of the HCCH. The deadline for the submission of applications is 20 May 2024 (18:00 CEST). More information is available here.
These monthly updates are published by the Permanent Bureau of the Hague Conference on Private International Law (HCCH), providing an overview of the latest developments. More information and materials are available on the HCCH website.
The European Parliament’s last plenary session & Private International Law
This post was written by Begüm Kilimcio?lu (PhD researcher), Thalia Kruger (Professor) and Tine Van Hof (Guest professor and postdoctoral researcher), all of the University of Antwerp.
During the last plenary meeting of the current composition of the European Parliament (before the elections of June 2024), which took place from Monday 22 until Thursday 24 April, several proposals relevant to private international law were put to a vote (see the full agenda of votes and debates). All of the regulations discussed here still have to be formally approved by the Council of the European Union before they become binding law, in accordance with the ordinary legislative procedure.
It is interesting to note that, while many pieces of new legislation have a clear cross-border impact in civil matters, not all of them explicitly address private international law. While readers of this blog are probably used to the discrepancies this has led to in various fields of the law, it is still worth our consideration.
First, the European Parliament voted on and adopted the proposal for a Directive on Corporate Sustainability Due Diligence (CSDDD) with 374 votes in favour, 235 against and 19 abstentions (see also the European Parliament’s Press Release). The text adopted is the result of fierce battles between the Commission, Parliament and the Council and also other stakeholders such as civil society, academics and practitioners. This necessitated compromise and resulted in a watered-down version of the Commission’s initial proposal of 23 February 2022 and does not go as far as envisaged in the European Parliament’s Resolution of 10 March 2021 (see also earlier blog pieces by Jan von Hein, Chris Tomale, Giesela Rühl, Eduardo Álvarez-Armas and Geert van Calster).
The Directive is one of the few instruments worldwide that put legally-binding obligations on multinational enterprises. It lays down obligations for companies regarding their adverse actual and potential human rights and environmental impacts, with respect to their own operation, the operations of their subsidiaries, and the operations carried out by their business partners in the chains of activities. The Directive further stipulates specific measures that companies have to take to prevent, mitigate or bring an end to their actual or potential adverse human rights impacts. Besides national supervisory authorities for the oversight of the implementation of the obligations, the Directive enacts civil liability for victims of corporate harm.
The adopted Directive is more or less silent on private international law. The closest it gets to addressing our field of the law is Article 29(7), placing the duty on Member States to ensure the mandatory nature of civil remedies:
Member States shall ensure that the provisions of national law transposing this Article are of overriding mandatory application in cases where the law applicable to claims to that effect is not the national law of a Member State.
and Recital 90, which is more general:
In order to ensure that victims of human rights and environmental harm can bring an action for damages and claim compensation for damage caused when the company intentionally or negligently failed to comply with the due diligence obligations stemming from this Directive, this Directive should require Member States to ensure that the provisions of national law transposing the civil liability regime provided for in this Directive are of overriding mandatory application in cases where the law applicable to such claims is not the national law of a Member State, as could for instance be the case in accordance with international private law rules when the damage occurs in a third country. This means that the Member States should also ensure that the requirements in respect of which natural or legal persons can bring the claim, the statute of limitations and the disclosure of evidence are of overriding mandatory application. When transposing the civil liability regime provided for in this Directive and choosing the methods to achieve such results, Member States should also be able to take into account all related national rules to the extent they are necessary to ensure the protection of victims and crucial for safeguarding the Member States’ public interests, such as its political, social or economic organisation.
While the text contains references to numerous existing Regulations, Brussels I and Rome I are not among them; not even a precursory or confusing reference as in Recital 147 of the GDRP.
Second, the European Parliament voted on two other proposals that build on and implement the objectives of the European Green Deal and the EU Circular Economy Action Plan. The first is a proposal for a Regulation establishing a framework for setting eco-design requirements for sustainable products with 455 votes in favour, 99 against and 54 abstentions (see also the European Parliament’s Press Release). The Regulation aims to reduce the negative life cycle environmental impacts of products by improving the products’ durability, reusability, upgradability, reparability etc. It sets design requirements for products that will be placed on the market, and establishes a digital product certificate to inform consumers.
This Regulation does not contain a private-international-law type connecting factor for contracts or products. Neither does it expressly elevate its provisions to overriding rules of mandatory law (to at least give us some private international law clue). Its scope is determined by the EU’s internal market. All products that enter the European market have to be in conformity with the requirements of both regulations, also those that are produced in third countries and subsequently imported on the European market (Art. 3(1)). “Products that enter the market” is the connecting factor, or the basis for applying the Regulation as overriding mandatory law. The Regulation is silent on products that exit the market. Hopefully the result will not be that products that were still in the production cycle at the time of entry into force will simply be exported out of the EU.
The third adopted proposal is the Regulation on packaging and packaging waste with 476 votes in favour, 129 against and 24 abstentions (see also the European Parliament’s Press Release). This Regulation aims to reduce the amount of packaging placed on the Union market, ensuring the environmental sustainability of the packaging that is placed on the market, preventing the generation of packaging waste, and the collection and treatment of packaging waste that has been generated. To reach these aims, the regulation’s key measures include phasing out certain single-use plastics by 2030, minimizing so called “forever chemicals” chemicals in food packaging, promoting reuse and refill options, and implementing separate collection and recycling systems for beverage containers by 2029.
Like the Eco-design Regulation, no word on Private International Law, no references. The Regulation refers to packaging “placed on the market” in various provisions (most notably Art. 4(1)) and recitals (e.g. Recitals 10 and 14).
Lastly, the European Parliament approved the proposal for a regulation on prohibiting products made with forced labour on the Union market with an overwhelming majority of 555 votes in favour, 6 against and 45 abstentions (see also the European Parliament’s Press Release). The purpose of this Regulation is to improve the functioning of the internal market while also contributing to the fight against forced labour (including forced child labour). Economic operators are to eliminate forced labour from their operations through the pre-existing due diligence obligations under Union law. It introduces responsible authorities and a database of forced labour risk areas or products.
Just as is the case for the other Regulations, this Regulation does not contain references to private international law instruments, and no explicit reference to instruments in this field, even though the implementation of the Regulation requires vigilance throughout the value chain. It would be correct to assume that this provides overriding mandatory law, as the ban on forced labour is generally accepted to be jus cogens even though the extent of this ban is contentious (see Franklin).
Other proposals that are more clearly in the domain of private international law have not (yet?) reached the finish line. First, in the procedure on the dual proposals in the field of the protection of adults of 31 May 2023, the European Parliament could either adopt them or introduce amendments at first reading. However, these proposals have not reached the plenary level before the end of term and it will thus be for the Conference of Presidents to decide at the beginning of the new parliamentary term whether the consideration of this ‘unfinished business’ can be resumed or continued (Art. 240 Rules of Procedure of the European Parliament).
In the second file, the proposal for a Regulation in matters of parenthood and on the creation of a European Certificate of Parenthood of 7 December 2022 the European Parliament was already consulted and submitted its opinion in a Resolution of 14 December 2023. It is now up to the Council of the European Union to decide unanimously (according to the procedure in Art. 81(3) of the Treaty on the Functioning of the European Union). It can either adopt the amended proposal or amend the proposal once again. In the latter case the Council has to notify or consult (in case of substantial amendments) the European Parliament again.
Ficticious service still active outside Europe
With the EU Service Regulation being active for more than 20 years, and the Hague Service Convention being ratified by almost all European countries, there is little space for practicing fictitious service of proceedings in Europe. However, for service to third countries outside Europe, and especially to continents, such as Africa, Asia, and the Middle East, remise au parquet is still the ground rule for many European countries. A recent judgment issued by the Piraeus Court of Appeal provides a clear picture of how the mechanism operates in Greece [Piraeus Court of Appeal, judgment nr. 142/2024, available here].
I. THE FACTS:
The parties are two companies active in the international maritime sector. The claimant, a Greek company with its seat in Piraeus, filed an action before the Piraeus Court of First Instance, seeking the award of the total sum of $29,163,200. The defendant, an Iranian company with its seat in Tehran, did not appear in the hearing. The action was upheld as being well founded in substance by the Piraeus Court of 1st Instance. The defendant was ordered to pay the equivalent of $28. 663,200.
Both the action and the first instance judgment were duly served on the Piraeus District Attorney, in accordance with the provisions of Articles 134 §§ 1 and 2, and 136 § 1 Code of Greek Civil Procedure (henceforth CCP), due to the defendant’s domicile in a non-member state of the European Union, thus excluding the application of EU law, and because Iran has not acceded to the Hague Convention of 15 November 1965, which requires actual service of documents by one of the methods provided for therein. Finally, the court underlined the absence of a bilateral agreement between Iran and Greece, which would possibly regulate the issues of service in a different manner.
The defendant lodged an appeal. The appeal was however untimely filed, because it was brought after the expiry of the sixty [60] days period following service of the judgment, provided for in Article 518 § 1 CCP, which began with the fictitious service of the judgment on the Public Prosecutor, to be sent to the Minister of Foreign Affairs, in order to be transmitted through diplomatic channels to the addressee, as provided for by Article 134 §§ 1 and 3 CCP.
The Iranian company acknowledged that the time-limit had expired without effect. For this reason, it filed a request for restitutio in integrum in accordance with Article 152 CCP, requesting that the appeal be considered as timely lodged, claiming that the delay in lodging the appeal was due to force majeure. In particular, it is asserted that the Iranian company did not receive notification of both the claim, which resulted in a default judgment without its participation in the trial at first instance, and of the judgment given in default of appearance, due to the service method selected, i.e., ficticious service to the Public Prosecutor, which sets the time-limit for the appeal. Secondly, the appellant asserts that that it acted within the time-limit laid down in Article 153 CCP, that is to say, immediately after real service.
The appellant invokes the delay caused by the Piraeus Prosecutor’s Office and the diplomatic services of the Country, which did not take care to complete service within two months. In other words, it relies on the omission of third parties, which it could not prevent, and which prevented the appellant from being aware of the fictitious service and the commencement of the time-limit for lodging an appeal in Greece.
II.THE JUDGMENT OF THE PIRAEUS COURT OF APPEAL
The appellate court ruled as follows: The lawsuit was forwarded by the Piraeus Prosecutor’s Office to the Minister of Foreign Affairs, in order to be served at the defendant’s headquarters in Tehran. The diplomatic authorities of Greece did indeed send and their counterparts in Iran did receive and forward the statement of claim to its addressee. However, the Iranian company’s agents, namely the secretariat and the clerk in the Legal Affairs Department, refused to receive it. This is evident from the “Letter of confirmation for declaration of received documents from foreign countries” issued by the International Affairs Department of the Judiciary of the Islamic Republic of Iran. This document states that the defendant, through its aforementioned nominees, refused to receive the disputed “document”.
The reason for that refusal is not specified. However, from the document of the Consular Office of the Embassy of Greece in Iran, and the attached document of the Ministry of Foreign Affairs of the Islamic Republic of Iran, it can be inferred that the refusal was made because the document to be served was not accompanied by an official translation into Farsi. Iranian law does indeed appear to permit refusal to accept service of a foreigner’s statement of claim against an Iranian national on that ground (a legal opinion of Mr., a lawyer at the Central Iranian Bar Association was submitted to the CoA by the appellant). Still, domestic Greek law does not make the validity of service of an action dependent on the attachment of a translated copy of the action in the language of the State of destination. Therefore, service of the action, if it had been completed, would always be valid under Greek law.
In addition, the mere attempt to serve the action made it clear to the defendant in any event, irrespective of whether it had been aware of its content from the outset, that a claim has being brought against it in a Greek court and triggered its obligation under Article 116 CCP to monitor the progress of the proceedings from that time onwards, even if it chose not to participate in the proceedings, which the defendant was able to do, by behaving in a prudent and diligent manner, and by following the fate of the action brought in Greece.
To that end, it was sufficient simply to appoint a lawyer in Greece, who would arrange for the translation of the documents, and would attend the ongoing proceedings at first instance. Such an action was made by the appellant only after actual service of the judgment.
Similarly, the applicant does not explain the reason why it did not act by appointing a lawyer in Greece, after the refusal to receive the summons of the claimant, even though it was also sent to it accompanied by a translation of the summons in English. That omission gives the impression that the refusal to receive the summons was made in order to prolong the proceedings, and to prepare for the lodging of the appeal and the application for restitutio in integrum, which on the whole is considered to be abusive.
Consequently, the application for restitutio in integrum was dismissed as unfounded and the appeal, which was nevertheless brought out of time, was dismissed as inadmissible.
III. COMMENT
The judgment of the Piraeus CoA is interesting because it goes a step further in the examination of fictitious service: It did not simply reiterate the wording of the domestic rules; moreover, it scrutinized the facts, and avoided a stringent application of Article 134 CCP. Due process and right to be heard were included in the court’s analysis. Finally, the court dismissed the legal remedies of the appellant due to its reluctance to demonstrate proactivity, and its intention to bring the Greek proceedings to a stalemate.